Types of Innovation, Adopter Categories and Stages in adoption process

1. INNOVATION

2. DEFINITION OF INNOVATION
The process of translating an idea or
invention into a good or service that creates
a value or for which customers will pay.
In business, innovation often result when
ideas are applied by the company in order to
further satisfy the needs and expectations of
the customers.

3. CATEGORIES OF INNOVATION
• Evolutionary Innovation that are brought about
by many incremental advances in technology or
processes.
• Revolutionary Innovations which are often
disruptive and new.

4. FIRM ORIENTED DEFINITION
A Firm oriented approach treats the newness of a
product from the perspective of the company
producing or marketing it. When the product is
“new” to the company, it is considered new.

5. PRODUCT ORIENTED DEFINITION
Product oriented approach focuses on the features
inherent in the product itself and on the effects
these features are likely to have on consumers’
established usage pattern.

6. TYPES OF PRODUCT INNOVATION
• Continuous Innovation has least disruptive
influence on established patterns
• Dynamically continuous Innovation is more
disruptive than a continuous innovation but still
does not alter established behavior patterns
Eg: Digital cameras, MP3 players, USB drives
• Discontinuous Innovation to adopt new
behavior patterns.
Eg: Airplanes, Radios, TVs, Automobiles

7. MARKET OREIENTED DEFINITION
Market oriented approach judges the newness of a
product have to the new product. Two market
oriented definitions used in consumer studies:
• A product is considered new if it has been
purchased by a relatively small (fixed) percentage
of the market
• A product is considered new if it has been on the
market for a relatively short (specified) period of
time

8. PRODUCT CHARACTERISTICS THAT
INFLUENCE DIFFUSION
Characteristics Definitions
Relative Advantage Degree to which potential customers perceive
a new product as superior to existing
substitutes
Compatibility Degree to which potential consumers feel a
new product is consistent with their present
needs, values and practices
Complexity Degree to which a new product is difficult to
understand or use
Trial ability Degree to which a new product is capable of
being tried on a limited basis
Observability Degree to which a product’s benefits or
attributes can be observed, imagined or
described to potential customers

9. TYPES OF INNOVATION
Receptive
Innovation
Use traditional
marketing and
alliance
strategies
Resistant
Innovation
What is the goal
of diffusing the
innovation?
Industry
goal why?
Consider
horizontal
cooperation/
competition
with other
industry players
Purely
competitive
advantage for
the company?
Consider
vertical
cooperation
with suppliers
or distributors

10. ADOPTER CATEGORIES
• Consumer Adopter Category 1: INNOVATORS
• Consumer Adopter Category 2: EARLY
ADOPTERS
• Consumer Adopter Category 3: EARLY
MAJORITY
• Consumer Adopter Category 4: LATE
MAJORITY
• Consumer Adopter Category 5: LAAGARDS

11. STAGES IN ADOPTION PROCESS
Name of Stage What happens during this stage
Awareness Consumer is first exposed to the product
innovation
Interest Consumer is interested in the product and
searches for additional information
Evaluation Consumer decides whether or not to believe
that this product or service will satisfy the
need- a kind of “mental trial”
Trial Consumer uses the product on a limited basis
Adoption (Rejection) If trial is favorable, consumer decides to use
the product on full rather than a limited basis-
if unfavorable, the consumer decides to reject
it

12. THANK YOU